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In what looks like a positive initial reaction by markets to the bailout of Spain, agreed at the weekend, the Euro has risen 1% against the dollar. US stock futures are also up. The Bangkok Times reported shortly after markets opened: “The single currency bought $1.2644 and 100.63 yen, against $1.2514 and 99.49 yen in New York on Friday.”

Reuters meanwhile reports: “U.S. stock index futures opened more than 1 percent higher on Sunday, suggesting Wall Street will extend the previous week's advance, which was the S&P's best of 2012.”

In the UK The Guardian leader today takes the deal and European politicians to task. First, it says, the Spanish rescue demonstrates that the crisis is not about feckless Government in the south but about deep underlying economic problems. Second though, it rightly points out, the deal is bigger than expected. That is adding to suspicions in Europe that there is more to come.

Meanwhile in the Sunday Telegraph, analyst Liam Halligan, refers to a £4o billion black hole in the UK banking sector. Not only Spanish banks but those in the UK and possibly also in countries like Holland are sitting on losses they would rather not reveal, exacerbating the problems of the real economy. Holland's Prime Minister today revealed that he opted to support the bail out because Dutch banks are heavily exposed to Spain.

Reuters sees the Spanish problem returning in late autumn, though that might be optimistic:

The European Union action is going to be a temporary success because the Spanish crisis is mostly centered around its banks, said Richard Hastings, macro and consumer strategist at Global Hunter Securities.

"The immediate effect on financial markets should be beneficial. Equity markets especially respond well to short-term improvements, while bond markets, especially higher-quality debt, might continue to send out signals in the form of very high prices and low yields that the trouble is not over," Hastings said.